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PENINSULA AIRPORT COMMISSION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2024
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Our review of the general journal entries revealed that manual entries lack secondary review and approval by
someone other than the preparer. We recommend the adoption of a policy whereby all journal entries are
approved by a designated member of management of the Commission, separate of the preparer. All entries
should be initialed, or electronically signed, by the preparer and the individual approving them in order to
attribute responsibility to the appropriate individuals.
Deferred inflows and outflows related to Virginia Retirement System (“VRS”) pension and GLI plans were not
properly recorded in the fiscal year ended June 30, 2023. A $17,413 adjusting entry to the respective deferred
amounts was necessary to properly state the ending balances as of June 30, 2024.
Our review of the Parking Lot Month End Reports revealed that the reports are not being properly reviewed
by the Commission.
Cause: Turnover in finance related positions without additional hiring and other Commission personnel cross
trained to fill the segregation void.
Effect: Lack of a segregation of duties increases the potential for inaccurate financial reporting and ineffective
finance management.
Recommendation: The Commission should review the current level of finance personnel and responsibilities and
address any identified deficiencies in number or knowledge of personnel through additional hiring’s, re-assignment
of responsibilities and cross-training of other Commission personnel to augment the finance control environment.
Views of Responsible Officials and Planned Corrective Actions: During the initial time period of COVID-19,
federal and state travel and other economic activity restrictions necessitated a severe reduction in staffing.
Anticipation of air travel recovery is being constantly reviewed so staffing plans can be properly structured to
achieve the numbers, task assignments, and knowledge necessary to ensure compliance. The national health
emergency was anticipated to be temporary. The accommodations and responses to it resulting in staffing
deficiency which were expected to be reversed in a pattern consistent with overall air travel recovery. The recovery
has proven to be lopsided and on the lower end of the spectrum with respect to all smaller airports. A key driver
in the smaller airport recovery is the industry wide recognized shortage in pilots. Especially hard hit is the category
of regional commuter jet service designed to feed the central main line airline hub terminals. The Peninsula Airport
Commission is no exception and has been significantly impacted by this macro-economic slowdown condition.
Airline allocation of their reduced available capacity now appears will be a main driver of continuing staffing
decisions. Measures to match operating costs with passenger activity revenue will be required. During the year
ended June 30, 2024, further staff reductions were necessary in light of budget and other funding constraints.
Significant redistribution of control processes and accounting activity assignments were required as part of the
staff reductions. With management’s endorsement and support, many accounting transaction processing tasks
have been turned over to staff not directly involved in the finance department. The processing time formerly
required by the finance department staff is now available for training of non-finance department associates. A side
benefit found from this new structure is the staff members not formerly associated with finance activities proved
to have knowledge of airport operations which is directly beneficial to understanding the financial transactions.
The time burden for these other staff members ended up being less than predicted. The new responsibilities are
considered a good control procedure for these accounting control reconciliations and reviews. Having more airport
staff involved leads to a natural separation of duties and additional independent sets of eyes on the process. By
having more staff involved, it was determined no incompatible process assignments related to journal entry posting
or accounting reconciliation controls will be an issue once the plan is fully implemented.
The process of training and allowance for the time necessary to gain the necessary experience is expected to be
lengthy. To achieve the fully desired segregation of accounting duties assigned to the identified non-finance staff
associates is best handled in a “get it right the first time” objective. The final system design will be handled by the
Chief Finance Officer with the review of appropriateness as to assignment of duties managed by the Acting Airport
Executive Director. All cross-training and personnel assignments are expected to be in place by July 1, 2025.
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